Sweden invests $143 million in Indonesian biofuel sector, companies obliged to have own plantations
Sweden BioEnergy will invest 1.3 trillion rupiah (€103.7/$143.5 million) in biofuel development in Indonesia by establishing a Jatropha curcas plantation on 100,000 hectares of land in the province of East Nusa Tenggara (map, click to enlarge) in the near future, an official has said. The announcement comes at a time that the Indonesian government is considering requiring biodiesel producers in the country to have their own dedicated plantations in order not to disrupt supplies of vegetable oils to the food industry.
The Swedish company which for the first time dealt with the biofuel sector in Indonesia last March, would also set up a biofuel processing plant in East Nusa Tenggara with a capacity of 350,000 tons per year, Al Hilal Hamdi, chairman of the Indonesian National Biofuel Development Team, said.
The chairman announced that 400 billion rupiah in investment would be used to procure 100,000 ha of land and the remaining 900 billion rupiah for funding the construction of the biofuel processing plant.
Sweden BioEnergy is one of 50 private companies interested in building the biofuel sector in Indonesia at a total cost of US$17 billion, or 150 trillion rupiah in the next few years.
Sweden is a staunch advocate of international biofuel trade and the largest importer of the fuels in Europe. At the recent landmark International Conference on Biofuels organised by the EU, the country's trade minister Sten Tolgfors also announced his government will work towards removing trade barriers to make sure European citizens get access to affordable fuels, whereas producers in the South can benefit from selling on the world's largest market (earlier post). Tolgfors also visited Indonesia and identified the country as a major player in such a global trade (more here).
Indonesia has been attracting a massive amount of foreign investment in the biofuel sector, so much so that it forced the government to put a moratorium on new private sector initiatives in order to allow for more time to develop appropriate policies.
Hilal also said that British Petroleum Plc which has a cooperation with D1 Oils Plc, planned to build a biofuel producing plantation on 1 million hectares of land in India, Indonesia and Africa (more here). The largest part of this 1 million ha plantation will be built in Indonesia:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: biodiesel :: jatropha :: Nusa Tenggara :: Indonesia :: Sweden ::
In the beginning, the BBN national team's secretary Evita Legowo said BP Plc had already explored a possibility of opening 100,000 ha of land for biofuel development in NTT, Papua, and Kalimantan.
The BP Plc and D1 Oil cooperation was part of an investment set at $160 million to develop the biofuel sector in India, South Africa and Southeast Asia, she said.
The government has predicted that the country`s biofuel development project until 2010 will cost 200 trillion rupiah, including 13 to 15 trillion allocated by the government and the rest by the private sector.
New plantations
Meanwhile, the Indonesian government is considering requiring biofuel industries to have their own plantations in order not to disrupt vegetable oil supplies to the food industry, Agriculture Minister Anton Apriyantono said. This will be especially the case for crude palm oil (CPO), prices of which have increased considerably.
At least upstream palm oil industries would continue to grow in the future to create more jobs, he said.
Asked about the low production of biofuel as an alternative energy source in the country, he said it was caused by its higher prices, the more so because the government still subsidized fuel oil prices.
"The government is also formulating a policy to boost the usage of biofuel now that under a presidential decree biofuel is expected to contribute to 5 percent of the national energy needs by 2025," he said.
Under the government`s biofuel promotion plan, Indonesia will increase the use of biofuel to 5.29 billion by 2010 and 9.84 billion liters by 2015.
Evita H. Legowo, an assistant to the Ministry of Energy and Mineral Resources said recently state oil and gas firm Pertamina - the only biofuel distributor in the country - was finding it hard to raise biofuel sales because of its higher prices.
The minister, quoting data from the Investment Coordinating Board (BKPM), said many foreign biofuel firms had applied for permits to operate in the country.
"We are also figuring out what kind of decision suitable to boost the use of biofuel. Do we need to provide biofuel subsidy or do we need to divert fuel oil subsidy to biofuel subsidy. To that end, we need inputs from stakeholders," he said. He said the country would need an estimated 12 million tons of CPO a year to produce oil palm-based biofuel.
References
Antara: Sweden invests Rp1.3 trln in Indonesian biofuel sector - July 24, 2007.
Antara: Biofuel firms may be obliged to have own oil palm plantations - July 24, 2007
The Swedish company which for the first time dealt with the biofuel sector in Indonesia last March, would also set up a biofuel processing plant in East Nusa Tenggara with a capacity of 350,000 tons per year, Al Hilal Hamdi, chairman of the Indonesian National Biofuel Development Team, said.
The chairman announced that 400 billion rupiah in investment would be used to procure 100,000 ha of land and the remaining 900 billion rupiah for funding the construction of the biofuel processing plant.
Sweden BioEnergy is one of 50 private companies interested in building the biofuel sector in Indonesia at a total cost of US$17 billion, or 150 trillion rupiah in the next few years.
Sweden is a staunch advocate of international biofuel trade and the largest importer of the fuels in Europe. At the recent landmark International Conference on Biofuels organised by the EU, the country's trade minister Sten Tolgfors also announced his government will work towards removing trade barriers to make sure European citizens get access to affordable fuels, whereas producers in the South can benefit from selling on the world's largest market (earlier post). Tolgfors also visited Indonesia and identified the country as a major player in such a global trade (more here).
Indonesia has been attracting a massive amount of foreign investment in the biofuel sector, so much so that it forced the government to put a moratorium on new private sector initiatives in order to allow for more time to develop appropriate policies.
The private companies' commitment to develop the biofuel sector in Indonesia is beyond our expectations. - Indonesian Biofuel Development national team chairman Al Hilal HamdiLast January, China National Offshore Oil Corporation (CNOOC) signed a $5.5 billion deal on the development of the biofuel sector in Indonesia, announcing the establishment of 3 processing plants in Kalimantan (earlier post). Other private companies like Genting Biofuel under a cooperation with Sinopec invested $3 billion while Indomal poured $1 billion in a biofuel development project in Indonesia.
Hilal also said that British Petroleum Plc which has a cooperation with D1 Oils Plc, planned to build a biofuel producing plantation on 1 million hectares of land in India, Indonesia and Africa (more here). The largest part of this 1 million ha plantation will be built in Indonesia:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: ethanol :: biodiesel :: jatropha :: Nusa Tenggara :: Indonesia :: Sweden ::
In the beginning, the BBN national team's secretary Evita Legowo said BP Plc had already explored a possibility of opening 100,000 ha of land for biofuel development in NTT, Papua, and Kalimantan.
The BP Plc and D1 Oil cooperation was part of an investment set at $160 million to develop the biofuel sector in India, South Africa and Southeast Asia, she said.
The government has predicted that the country`s biofuel development project until 2010 will cost 200 trillion rupiah, including 13 to 15 trillion allocated by the government and the rest by the private sector.
New plantations
Meanwhile, the Indonesian government is considering requiring biofuel industries to have their own plantations in order not to disrupt vegetable oil supplies to the food industry, Agriculture Minister Anton Apriyantono said. This will be especially the case for crude palm oil (CPO), prices of which have increased considerably.
The development of downstream industry is inseparable from its upstream industry, meaning that biofuel firms must have their own oil palm plantations - Agriculture Minister Anton ApriyantonoSpeaking during a national seminar on CPO for food or energy, the Agriculture Minister said the government was mulling the obligation for biofuel industries to keep CPO supplies in check.
At least upstream palm oil industries would continue to grow in the future to create more jobs, he said.
Asked about the low production of biofuel as an alternative energy source in the country, he said it was caused by its higher prices, the more so because the government still subsidized fuel oil prices.
"The government is also formulating a policy to boost the usage of biofuel now that under a presidential decree biofuel is expected to contribute to 5 percent of the national energy needs by 2025," he said.
Under the government`s biofuel promotion plan, Indonesia will increase the use of biofuel to 5.29 billion by 2010 and 9.84 billion liters by 2015.
Evita H. Legowo, an assistant to the Ministry of Energy and Mineral Resources said recently state oil and gas firm Pertamina - the only biofuel distributor in the country - was finding it hard to raise biofuel sales because of its higher prices.
The minister, quoting data from the Investment Coordinating Board (BKPM), said many foreign biofuel firms had applied for permits to operate in the country.
"We are also figuring out what kind of decision suitable to boost the use of biofuel. Do we need to provide biofuel subsidy or do we need to divert fuel oil subsidy to biofuel subsidy. To that end, we need inputs from stakeholders," he said. He said the country would need an estimated 12 million tons of CPO a year to produce oil palm-based biofuel.
References
Antara: Sweden invests Rp1.3 trln in Indonesian biofuel sector - July 24, 2007.
Antara: Biofuel firms may be obliged to have own oil palm plantations - July 24, 2007
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